02 December 2010

Free Riders of the Purple Wage-Slave

I'm not exactly late for the party, but this piece on Amazon's disrespect for what it is selling has been making the rounds. At a deeper, theoretical level, though, it indirectly exposes a question about publishing as it exists. Put as baldly as I can: Is it appropriate to expect the same purely financial returns in a business that is built upon preexisting, specific government protection for something of cultural value, or should/must one allow for a hidden "tax" on returns in exchange for the protection of the First Amendment?

Amazon is not subject to an equivalent of "dram-shop laws" if it sells a copy of The Pr0t0c0ls of the Eld3rs of Zi0n to a larval antisemite who then goes out and blows up a synagogue; nor is Amazon liable if someone buys a used copy of Hitman through its affiliate-seller store and kills an ex-spouse. Similarly, Bertelsmann is not liable if someone buys a copy of The Autobiography of Malcolm X, decides that The Man must die, and engages in a killing spree on the Washington Mall. Although we're still fighting over whether the person/party who sells actual weapons is liable — it's a much more difficult question, both procedurally and substantively, than it seems — the First Amendment pretty well insulates the publishers and sellers of written material from liability (short of purposeful facilitation of direct confrontation on some misbegotten daytime talk show, and even that is dubious at best).

Nonetheless, investors and managers expect to free-ride on the First Amendment, obtaining the same returns with the "free insurance" of First Amendment protection as they do from any other kind of business (such as selling soap). I'm not arguing that publishing should therefore be nonprofit, by any means; I'm arguing, instead, for some recognition that the appropriate median return from distributing First-Amendment-favored materials must acknowledge the subsidy that it gets from the First Amendment, and therefore will be discernably lower than that in a true commodity industry. And, in turn, that goes for distributors. Hypothetically, if the First Amendment is worth a 3% premium, investors should be satisfied with a 5% return in publishing if they would otherwise be satisfied with an 8% return. (Those numbers are just for illustration.) However, they're not; and neither are managers, particularly those imported from other areas of the entertainment industry that are somewhat farther from core First Amendment concerns.

This also ties into the ancient two-cultures debate: Maybe the problem is poor communication as much as anything else. Just like in law...

In any event, what one is selling does matter to the appropriate means of selling, whether "appropriate" is measured by "profits accounting for all externalities and subsidies" or any other means. Mr Bezos, for one, clearly does not understand that.